‘Four more years’ of house shortages

Eamon Quinn

Glenveagh, the stockmarket-listed housebuilder, has predicted it will take four more years before new housing supply comes anywhere near catching up with demand, as it unveiled a major site acquisition in the Cork docklands for 1,000 new homes.

Speaking to reporters following its first AGM since it sold shares on the Irish Stock Exchange last October, the company reiterated forecasts that prices of starter homes will rise 5% a year.

That’s below the current double-digit price increases across the market because they take into account the huge house price hikes for second-time homes.

Glenveagh Chief executive, Justin Bickle

Chief executive Justin Bickle — one of the three principal founders of the property firm — estimated only 15,000 new homes would be built across the State, well short of the 35,000 needed to satisfy demand.

He hailed the current “very favourable” market conditions for housebuilders, telling shareholders it had surpassed its IPO pledge and plans to have 1,500 homes under construction by the end of the year.

Having spent over €400m since October’s market debut, it said it has all but completed the purchase of a 4.6-hectare site in the Cork docklands on which it plans to build 1,000 apartments.

It will pay “in excess of €15m” for the land and is satisfied it can deal with any potential contamination on the docklands site.

Once built, the apartments may be sold on to an institution for rental. Its major activities remain focused on the Dublin region but it said it will continue to seek land sites in Cork, Galway and Limerick, tapping €100m that remains in its acquisition chest.

Other new land sites acquired include a 16.2 hectare site of zoned land in the Dublin area for 400 homes at a price of over €20m; the purchase of a site for 700 homes, which is also located in Dublin, for over €9m; as well as a €60m purchase of the loans linked to a 2.44 hectare Castleforbes Business Park in the north docklands in Dublin for 650 units.

Mr Bickle said the firm had nothing to fear from any so-called tax to prevent land hoarding, as recommended by the IMF in a major report on Ireland this week.

At the AGM, a shareholder called for an external review of the share-based incentives available to the principal directors.

Debut earnings last March showed €47.5m costs of “the founder shares” set aside at the IPO for the three principals — CEO Mr Bickle; chairman John Mulcahy, a former senior Nama executive; and chief operating officer Stephen Garvey.

Mr Mulcahy told journalists the three principals had driven the foundation of the company. Shares in Glenveagh rose slightly yesterday, valuing it at just over €767m.


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